Thursday, December 9, 2010
Airports in Asia
I have started another blog with an emphasis on Southeast Asian Airports. Check it out.
Friday, December 3, 2010
Closing an airport - Edmonton City Centre Airport
I had written earlier about the closing of the municipal airports and what they had become. (Austin Mueller and Denver Stapleton). Closing an airport is never straightforward. There people who want the municipal airport closed when the bigger newer airport further from the city is opened and there are others who want the smaller airport near the city center to stay open.
Edmonton in Alberta Canada is a case in point. The larger airport was opened in 1960. In 1995, it was decided that all scheduled jet passenger service will be consolidated at the larger airport (Edmonton International Airport-EIA). EIA is located 16 miles (26km) from downtown Edmonton.
The Edmonton City Centre Airport plays an important role in air ambulance service for the province of Alberta and for general aviation. It also host aviation related activities. However, it hinders commercial development in the downtown area as the 2 runways causes significant height restrictions that prevents the growth of the downtown area. The Airport is in the top left corner of the picture and the downtown area is in the bottom right corner of the picture on the north bank of the river.
In 2009, the City Council decided on a phased closure of the airport and on Aug 3, 2010, the north-south runway (16/34) was closed.
From the Edmonton City Government website:
City Council voted in July 2009 to implement a phased closure of the City Centre Airport after 18 months of study, analysis and public input.
Status quo was not an option:
- one of the runways would have required up to $10M in capital upgrades to remain operational other upgrades were estimated at up to $35M over the next 5-10 years
- revisiting the cap on passenger traffic would have incurred significant legal liabilities
Current status:
- One runway has been closed, one runway remains open.
- The open runway can remain operational until Council determines the land is needed for redevelopment, based on market demand.
- Air ambulance services (mostly patient transfer) continue to operate at the City Centre Airport, and can do so for the foreseeable future.
Why close?
In making their decision, Council requested an analysis of five main perspectives: historical importance, economic impact, market feasibility, medevac, and public consultation.
Council also discussed the potential of the land for the citizens of Edmonton. Redeveloping the land into a family-focused, residential/commercial community that will be a world leader in environmental, cosmopolitan development would benefit Edmonton by:
- helping rein in urban sprawl and create family-focused neighbourhoods in the heart of our city
- modeling an environmentally sustainable community where people can walk to their work, amenities, parks, recreation and services.
- eliminating height restrictions on development elsewhere in the downtown core.
- increasing revenue to the City over the long term (between $91M and $486M), which helps reduce the burden on taxpayers. The City received $1.1M in taxes annually from businesses on the land.
Council voted for a phased closure of the airport, over time, with the following considerations:
Medevac:
- Changes to medevac will only occur when Alberta Health Services has sufficient plans and facilities in place to ensure patient safety and undisrupted service.
- Emergency helicopters can land at Edmonton hospital helipads. The majority of air ambulance flights that land at the City Centre airport are fixed-wing aircraft that carry patients for medical appointments.
Economic impact
- The City will be the land developer and gain the revenue from the development and from business and property tax.
- The Edmonton Economic Development Corporation supports the closure of the Edmonton City Centre Airport (ECCA) because the redevelopment of the ECCA land "is in the economic best interest of the city." Read more
Redevelopment:
- The City has announced five finalists in an international design competition for the lands. Each will receive a $50,000 honorarium for further developing their proposals, but the 33 submissions did not receive any payment.
- The public will have the chance to review the design proposals and public consultation will help shape the final neighbourhood development.
Environment:
- Remediation would have to occur regardless of future use of the land - as an airport or neighbourhood.
- From preliminary tests, which covered more than half the property, only three small areas may have limited environmental contamination.
Historical importance and preservation
- The City will incorporate our aviation heritage in the community development, such as with street and neighbourhood naming, and by using aviation facilities for museum space.
- The Aviation Museum is an integral part of our City’s heritage and the City aims to enhance the museum’s role and to advance the concept of a Mall of Museums on the site.
You can get a taste of the ongoing situation at the following links:
Advanced Imaging Technology (AIT) aka Whole Body Imaging
There has been a lot of discussion recently about Advanced Imaging Technology (AIT) machines at TSA checkpoints for passenger screening. These were formerly known as Whole Body Imaging (WBI) machines. There are basically two types of machines that have been deployed. The first is made by Rapiscan and the second by L-3.
Rapiscan Secure 1000 Single Pose deployed at airports requires 2 Rapiscan Secure 1000s.
This presentation gives a good summary about AIT and the AT machines and its impact on existing facilities. (click here)
The following is an extract from the presentation by Gresham, Smith and Partners at the ACI Operations/Technical Spring Conference 2010:
•AIT Portals can add from 1400 lbs to 2000 lbs of additional structural load per scanner
•AT X-ray can add from 1200 lbs to 2100 lbs of additional structural load per x-ray
•Existing checkpoint footprints may need to increased to accommodate advanced technologies
•AIT throughput can impact queuing lengths and wait times
Fitch Ratings - Criteria for Airports
Financing is a important part of airport development. Bond Ratings by companies (e.g.Fitch Ratings) determine the ability to sell the bonds and the interest rates among other things. I came across this in an Airport Business Article that talked about the Fitch Ratings' Criteria for Airports. (click here)
The following is an extract from the 24 page Fitch Ratings Article "Criteria for Airport". It requires a registration (that is free) to access. Please register with them to read the full article.
" This criteria report provides an overview of Fitch Ratings’ analytical approach to evaluate debt issued by airports across the globe and should be read in conjunction with the agency’s report, “Rating Criteria for Infrastructure and Project Finance”, published on 16 August 2010 at www.fitchresearch.com. The rating levels discussed in this report relate to Fitch’s international credit rating scale and reflect standalone creditworthiness without considering external credit enhancement or government support.
The criteria apply both to standalone airports and multi-airport systems in full operation with an active commercial service and an operational history. They also apply to multiple forms of ownership, governance, and legal status, whether in the form of a listed company, private corporation, special-purpose project company, or public law entity. The criteria also cover specific rating drivers for new airport construction or those airport-related facilities that have substantial construction and completion risks. In such cases, the rating rationale may be influenced more by completion-related factors.
For standalone project financings within an airport (i.e. non-recourse terminals, fuel facilities, rental car centers, and cargo facilities), the ownership framework, structural protections, and completion risk will be more relevant rating considerations than is the case for financings secured by a broad pledge of airport revenue. The corporate rating of key counterparties and corporate tenants, as well as the legal or economic ability to substitute defaulting or departing tenants, will also play a central role in analyzing such financings.
Two critical concepts are developed throughout the criteria: 1) the resilience of demand; and 2) airport flexibility to offset historical volatility associated with the airline industry. Each individual airport will have varying degrees of resilience and flexibility. The stronger credits tend to be the large gateway and hub airports as they demonstrate less volatile demand and more flexibility in recovering costs from airline counterparties and maintaining stable net revenues. Regional airports and secondary hubs are generally more volatile and have less financial flexibility. Fitch’s ratings reflect a combination of relative volatility and flexibility that is strengthened or weakened by degrees of financial risk, structural protections, and leverage."
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There is also a cross reference to another 24 page report "Rating Criteria for Infrastructure and Project Finance" by Fitch Ratings. The following is an extract. Please register with them to read the full article.
" Fitch Ratings’ rating approach to infrastructure and project finance debt instruments is used where repayment is dependent upon cash flows from the construction, operation and in some cases handover of a standalone project (which may encompass several project assets in different locations). Additionally, for these criteria to apply, the assets and operation of the project would be within a project vehicle or achieve an equivalent segregation of project cash flows such as a separate enterprise fund within a governmental entity; in either case referred to as a single‐purpose project (SPP) in this report. Such projects typically arise in the power, transportation, telecommunications, oil and gas, industrial, mining and social infrastructure sectors.
Fitch’s analysis firstly addresses the potential of the project to generate a stable cash flow based on its legal framework and fundamental economics together with any political or macroeconomic risks. The agency then considers the financial structure to form an opinion on the capacity of those cash flows to service the rated debt instruments in accordance with their terms. Some risk factors in this report may not always be applicable depending upon the nature of the project or debt instrument.
Fitch’s global infrastructure and project finance ratings under these criteria are assigned to individual debt instruments and are therefore issue ratings. They take account of timeliness of payment, reflecting the instrument’s terms, and do not incorporate recovery prospects given a default.
When analysing the project, a Fitch analyst will consider factors such as project rationale, the sponsor and legal structure, completion risk, technology risk, operating and maintenance risk plus risks to project gross revenue from volume, price or availability. Sovereign, political and industry risks are also considered here together with future capital expenditure and information quality. Risk allocation is a key feature of project finance and Fitch will assess its impact on the SPP, as appropriate for each risk factor, which in most cases will include a minimum level of creditworthiness consistent with the significance of the allocated risk."
Friday, September 10, 2010
Opening / Activating a new airport terminal (ACRP Synthesis Report 20)
ACRP Synthesis Report 20 (click here) addresses the activation of a new Airport Terminal.
"TRB’s Airport Cooperative Research Program (ACRP) Synthesis 20: Airport Terminal Facility Activation Techniques explores lessons learned during terminal activations at 13 domestic and international airport facilities. The report is designed to help identify effective airport terminal facility activation practices."
The most recent case study that can be looked at is the opening of Delhi Airport Terminal 3 in India. It opened with the shifting of International flights there in late July 2010. The Domestic flights were to shift there shortly after. This has since been delayed till after the Commonwealth Games in Oct 2010.
Having traveled through Delhi Terminal 2 before, I must say that the opening of Terminal 3 is a good thing. As always, there are teething problems which I am sure will be worked out in due course.
Problems at the newly opened Delhi Airport Terminal 3.
1. Power Supply
2. Water Supply
3. Road Congestion
4. Baggage issues
5. Shops which have not opened
6. Directions/wayfinding to the new terminal
Personally, I think it is still a great achievement that the terminal (48 contact gates, 502,000sqm or 5.4million sqft) has been opened before the Commonwealth Games. The Terminal opened in July 2010, just barely 4 years after the signing of the agreement (in Apr 2006) for a private operator GMR to operate New Delhi Airport.
Useful Resources / Applied Research Reports for Airport Planners - ACRP Reports
These are the Airport Cooperative Research Program (ACRP) reports which, in my view, are of greater interest to airport planners. The ACRP is part of the Transportation Research Board (TRB) and is funded to the tune of US$10-15million a year by the United States Federal Government.
Each report answers a specific problem which the US Airport industry is facing (Applied Research) and takes about 2-3 years of research. Each report costs between $300,000 to $400,000. However, because it is federally funded and their aim is the widest dissemination possible, the pdf files are available for free at their website.
The synthesis reports cost less and take a shorter time to publish because it not new research but a collection of what's out there on a particular airport topic in one report.
Click here to go to the ACRP report library. I have also added hyperlinks for each of the reports listed below. (updated Dec 7, 2010)
Each report answers a specific problem which the US Airport industry is facing (Applied Research) and takes about 2-3 years of research. Each report costs between $300,000 to $400,000. However, because it is federally funded and their aim is the widest dissemination possible, the pdf files are available for free at their website.
The synthesis reports cost less and take a shorter time to publish because it not new research but a collection of what's out there on a particular airport topic in one report.
Click here to go to the ACRP report library. I have also added hyperlinks for each of the reports listed below. (updated Dec 7, 2010)
Report 10 Innovations Terminal Facilities
Report 13 Integrating Airport Information Systems
Report 16 Managing Small Airports (useful for overview of airports in general)
Report 20 Strategic Planning
Report 21 Project Delivery Methods
Report 23 Passenger Processing Rate
Report 24 Parking Strategies
Report 25 Terminal Planning
Report 27 Enhancing Land Use Compatibility
Report 30 Common Use at Airports
Report 34 Constrained Parking
Report 35 Offsite Airport Terminals
Synthesis Report 1 Innovative Finance
Synthesis Report 2 Forecasting
Synthesis Report 5 Ground Access choice
Synthesis Report 8 Common Use Facilities and Equipment
Synthesis Report 10 Airport Sustainability Practices
Synthesis Report 14 Airport Systems Planning
Synthesis Report 17 Airport Development and Federal Environmental Review
Synthesis Report 19 Revenue Diversification
Synthesis Report 20 Airport Terminal Activation
Tuesday, April 20, 2010
Airport Passenger Terminal Planning and Design Guidebook
The Transportation Research Board (TRB)'s Airport Cooperative Research Program (ACRP) has released the long awaited Terminal Planning and Design Guidebook. The other 2 industry standards with regards to Terminal planning that I am aware of are:
1. FAA Advisory Circular 150/5360-13 (4) - Planning and Design Guidelines for Airport Terminal Facilities published in 1988 (click here)
2. IATA Airport Development Reference Manual (ADRM) published in 2004 (click here)
Pdfs of the new guidebook are available for download (for free) at the following links:
Volume 1: Guidebook (click here)
"explores the passenger terminal planning process and provides in a single reference document, the important criteria and requirements needed to help address emerging trends and develop potential solutions for airport passenger terminals. It addresses the airside, terminal building, and landside components of the terminal complex."
Volume 2: Spreadsheet Models and User's Guide (click here)
"consists of a CD-ROM containing 11 spreadsheet models, which include practical learning exercises and several airport-specific sample data sets to assist users in determining appropriate amodel inputs for their situations, and a user's guide to assist the user in the correct use of each model. The models on the CD-ROM includes such aspects of terminal planning as design hour determination, gate demand, check-in and passenger and baggage screening, which require complex analyses to support planning decisions.
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